<p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The Coastal Shipping (Licensing of Foreign Vessels) Rules, 2026, notified by the Ministry of Ports, Shipping and Waterways on October 14, establish the operational architecture for foreign-flag vessels seeking to engage in India's coastal trade and certain international trade operations involving Indian charterers </span><span class="">. The rules were framed under Section 39 of the Coastal Shipping Act, 2025, which was passed by Parliament earlier this year to carve out coastal shipping regulation from the Merchant Shipping Act, 1958 and create a dedicated legislative framework for the sector </span><span class="">.</span><span class="_5f9bba8" data-citation-group="1" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.scconline.com/blog/post/2026/10/26/coastal-shipping-licencing-of-foreign-flag-vessels-rules-2026-notified/" target="_blank" rel="noreferrer" aria-label="1" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://www.worldports.org/rajya-sabha-clears-new-coastal-shipping-bill/#1" target="_blank" rel="noreferrer" aria-label="14" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The licensing framework applies to foreign-flag vessels operating in India's coasting trade and to vessels chartered by Indian entities under Section 11(1) of the Act </span><span class="">. Three charter types are recognised: voyage charter, time charter and contract of affreightment. Licences are further categorised by trade type—export, import, coastal, worldwide and offshore operations—allowing the Director-General of Shipping to tailor conditions to the specific operational context </span><span class="">. This categorisation reflects the government's effort to maintain regulatory oversight while accommodating the diverse commercial arrangements under which foreign tonnage is deployed in Indian waters.</span><span class="_5f9bba8" data-citation-group="4" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.scconline.com/blog/post/2026/10/26/coastal-shipping-licencing-of-foreign-flag-vessels-rules-2026-notified/" target="_blank" rel="noreferrer" aria-label="1" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The application process is time-sensitive and digitally administered. Under Rule 4(3), applications must be submitted through the e-Samudra portal at least 72 hours before the laycan date, with the First Schedule prescribing the required documentation </span><span class="">. A late fee of ₹50,000 applies under the Second Schedule, and licence fees are payable through the Bharatkosh portal </span><span class="">. An additional levy is prescribed for charterers of offshore vessels that are not classed with the Indian Register of Shipping and are more than 25 years old—a provision that implicitly discourages the deployment of ageing, non-IACS-classed tonnage in offshore operations </span><span class="">.</span><span class="_5f9bba8" data-citation-group="6" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.scconline.com/blog/post/2026/10/26/coastal-shipping-licencing-of-foreign-flag-vessels-rules-2026-notified/" target="_blank" rel="noreferrer" aria-label="1" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">Document verification covers a range of compliance considerations. Applicants must declare adherence to the Act and rules, and supporting documents may address Right of First Refusal compliance, vessel age, quality standards and Indian crew placement </span><span class="">. The Director-General issues the licence after verification and may impose additional conditions </span><span class="">. Crucially, a valid licence must be presented for port clearance by the licensee or the vessel's agent—making the licence a precondition not merely for operation but for the vessel's ability to clear port formalities </span><span class="">. This linkage to port clearance gives the framework operational teeth that a purely declaratory regime would lack.</span><span class="_5f9bba8" data-citation-group="9" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.scconline.com/blog/post/2026/10/26/coastal-shipping-licencing-of-foreign-flag-vessels-rules-2026-notified/" target="_blank" rel="noreferrer" aria-label="1" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The rules also establish procedures for extensions, modifications, compounding of offences and appeals. Extensions for delayed voyages may be requested without a fresh NoC under Rule 7(1), while modifications require an application through e-Samudra with applicable fees </span><span class="">. Compounding applications are made to a designated compounding officer under the Fourth Schedule, with the officer empowered to accept or reject applications after affording a hearing and recording written reasons </span><span class="">. Appeals against penalty orders must be filed with the Director-General within 30 days, following the Fifth Schedule </span><span class="">. Where a foreign-flag vessel is detained, the relevant consular office of the flag State must be informed </span><span class="">.</span><span class="_5f9bba8" data-citation-group="12" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.scconline.com/blog/post/2026/10/26/coastal-shipping-licencing-of-foreign-flag-vessels-rules-2026-notified/" target="_blank" rel="noreferrer" aria-label="1" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The regulatory context surrounding these rules has been marked by policy oscillation on cabotage relaxation. The government had moved in January 2026 to roll back the 2018 general orders that allowed foreign-flag vessels to carry EXIM transshipment containers, empty containers, agricultural products and fertilisers between Indian ports without a licence </span><span class="">. That rollback was deferred in March and then effectively reversed in August, when the ministry restored the 2018 relaxations, citing the need for policy stability amid geopolitical disruptions and global shipping capacity constraints </span><span class="">. The new licensing rules therefore operate alongside a cabotage regime that remains partially liberalised, with foreign vessels permitted to carry specified cargo categories on coastal routes under the restored general orders.</span><span class="_5f9bba8" data-citation-group="16" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.thehindubusinessline.com/economy/logistics/shipping-ministry-retains-relaxations-for-foreign-ships-in-coastal-trade-indian-vessels-to-face-continued-competition/article71407308.ece?utm_source=flipboard&amp;utm_content=TheHindu/magazine/BusinessLine#1" target="_blank" rel="noreferrer" aria-label="5" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://infra.economictimes.indiatimes.com/news/ports-shipping/govt-brings-back-partial-easing-of-cabotage-in-bizarre-policy-flip-flop/133449839?utm_source=latest_news&amp;utm_medium=homepage" target="_blank" rel="noreferrer" aria-label="6" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">For Indian shippers and logistics operators, the practical implications are twofold. First, the licensing requirement adds a compliance step for foreign-flag vessels engaged in coastal and EXIM trades, with the 72-hour application window requiring advance planning by charterers and agents. Second, the rules formalise a regime in which foreign tonnage remains available for Indian trade but under documented authorisation rather than open access. The extent to which this affects vessel availability and freight costs on coastal routes will depend on how efficiently the e-Samudra licensing process functions in practice and whether the 72-hour lead time proves adequate for spot charter arrangements. For now, the framework represents a consolidation of regulatory authority over foreign-flag participation in Indian coastal trade—a sector where the balance between protecting Indian tonnage and ensuring adequate capacity for trade remains unresolved.</span></p>